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A fixed cost of $1000 is incurred in producing a batch of 200 machine

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A fixed cost of $1000 is incurred in producing a batch of 200 machine  [#permalink]

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New post 22 Mar 2018, 10:27
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Question Stats:

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A fixed cost of $1000 is incurred in producing a batch of 200 machine tools. Additionally, $20 goes into the finishing and packaging of each machine tool. If a consignment of 50 batches was sold for $1000000, what is the percentage profit earned by the company on this consignment?

A. 30%
B. 300%
C. 3000%
D. 60%
E. 600%

Source: Experts Global

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A fixed cost of $1000 is incurred in producing a batch of 200 machine  [#permalink]

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New post 22 Mar 2018, 13:07
pushpitkc wrote:
A fixed cost of $1000 is incurred in producing a batch of 200 machine tools. Additionally, $20 goes into the finishing and packaging of each machine tool. If a consignment of 50 batches was sold for $1000000, what is the percentage profit earned by the company on this consignment?

A. 30%
B. 300%
C. 3000%
D. 60%
E. 600%

Source: Experts Global

Percentage profit: \(\frac{(TR-TC)}{TC}*100\)

Total Cost (TC)
50($1000) + ($20)(50*200) = $250,000

Percentage profit:
\(\frac{$1,000,000-$250,000}{$250,000}*100\)=

\((\frac{$750,000}{$250,000}*100)= 3 * 100= 300\)
%

Answer B

Similar formula, per batch cost first

Percentage profit =
\(\frac{(TR-TC)}{TC}*100\) <-> \(\frac{GrossProfit}{TC}*100\)

1) Cost price of 1 batch (= 200 tools)?
$1,000 fixed + $20/tool (* 200 tools)
$1,000 + ($20)(200)
$1,000 + $4,000 = $5,000 cost price per batch

2) Total cost (TC) of 50 batches?
(50 * $5,000) = $250,000

3) TR, given = $1,000,000

4) Gross profit = (TR - TC)
($1,000,000 - $250,000) = $750,000

5) Percentage profit =\(\frac{GrossProfit}{TC}*100=\)

\((\frac{$750,000}{$250,000}*100)= 3 * 100= 300\)
%

Answer B
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Re: A fixed cost of $1000 is incurred in producing a batch of 200 machine  [#permalink]

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New post 22 Mar 2018, 14:45
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I found it easiest to figure out the total cost of producing a single batch (1000+4000), then figure out the revenue for each batch (20000), so profit is 15000 which is 3 times 5000 which works out to 300%
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A fixed cost of $1000 is incurred in producing a batch of 200 machine  [#permalink]

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New post 23 Mar 2018, 11:08
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hawesg wrote:
I found it easiest to figure out the total cost of producing a single batch (1000+4000), then figure out the revenue for each batch (20000), so profit is 15000 which is 3 times 5000 which works out to 300%

hawesg , Creative solution. +1
And welcome to GMAT club! (I'm late by a few weeks. :-) )
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Re: A fixed cost of $1000 is incurred in producing a batch of 200 machine  [#permalink]

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New post 23 Mar 2018, 15:24
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generis wrote:
hawesg wrote:
I found it easiest to figure out the total cost of producing a single batch (1000+4000), then figure out the revenue for each batch (20000), so profit is 15000 which is 3 times 5000 which works out to 300%

hawesg , Creative solution. +1
And welcome to GMAT club! (I'm late by a few weeks. :-) )

To be fair I started writing it out the long way before I realized it wasn't required.
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A fixed cost of $1000 is incurred in producing a batch of 200 machine  [#permalink]

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New post 03 Apr 2018, 04:12
A fixed cost of $1000 is incurred in producing a batch of 200 machine tools. Additionally, 20$ goes into finishing and packaging of each machine tool. If a consignment of 50 batches sold for $1,000,000. What is the percentage of profit earned by the company on this consignment?

a) 30%
b) 300%
c) 3000%
d) 60%
e) 600%
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Re: A fixed cost of $1000 is incurred in producing a batch of 200 machine  [#permalink]

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New post 03 Apr 2018, 07:09
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sandysilva wrote:
A fixed cost of $1000 is incurred in producing a batch of 200 machine tools. Additionally, 20$ goes into finishing and packaging of each machine tool. If a consignment of 50 batches sold for $1,000,000. What is the percentage of profit earned by the company on this consignment?

a) 30%
b) 300%
c) 3000%
d) 60%
e) 600%


Hi,

The question is already posted in the below link. Kindly follow the rules of posting and search before you post. Thanks

https://gmatclub.com/forum/a-fixed-cost ... fl=similar
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Re: A fixed cost of $1000 is incurred in producing a batch of 200 machine &nbs [#permalink] 03 Apr 2018, 07:09
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